BP has taken the axe to its solar power business. Photograph: Stefan Wermuth/Reuters

BP has taken the axe to its solar power business, saying it "can't make any money" from selling panels at a time when it continues to spend $20bn annually on oil and gas developments.

The energy group, which once promised to move "beyond petroleum", was an important player in solar but has over the last three years gradually closed its panel factories and made around 1,750 workers redundant.

Mike Petrucci, chief executive of BP Solar, wrote to his remaining 100 staff last week, saying "the continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company."

A spokesman for the wider group said the plunging value worldwide of solar panels – partly as a result of low-cost competition from China – had convinced BP that it had no future in a "commoditised" business.

But the spokesman said BP was fulfilling its previous commitment to spend $8bn on renewable power up to the year 2015 and was continuing to forge ahead with onshore wind in the US and biofuels worldwide.